Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's affirms Albania's B1 rating, maintains stable outlook

04 Aug 2017

London, 04 August 2017 -- Moody's Investors Service, ("Moody's") has today affirmed the Government of Albania's B1 long-term foreign and local currency issuer ratings and the B1 foreign currency senior unsecured rating. The outlook remains stable.

The decision to affirm the ratings and maintain the stable outlook balances the following key rating factors:

(1) Progress on fiscal consolidation, structural reforms and institutional capacity building;

(2) Structural economic challenges, despite improving growth prospects; and

(3) A still high, albeit declining, debt burden with unfavorable structure of domestic debt

Albania's long-term foreign currency bond and deposit ceilings remain unchanged at Ba2 and B2, respectively. The local currency bond and deposit ceilings remain unchanged at Baa3.

RATINGS RATIONALE

AFFIRMATION OF B1 LONG-TERM ISSUER AND SENIOR UNSECURED RATINGS

The decision to affirm Albania's credit rating takes into account the significant progress achieved in recent years in terms of fiscal consolidation and structural and institutional reforms. These support the current rating by helping to reverse the damage to the government's balance sheet caused by the financial crisis. However, offsetting these positive developments are a number of credit challenges that continue to weigh on the country's credit profile. These include the still high, albeit declining, debt burden, still large financing needs reliant on the banking system, and a small economy with a narrow export base.

FIRST DRIVER: PROGRESS ON FISCAL CONSOLIDATION, STRUCTURAL REFORMS AND INSTITUTIONAL CAPACITY BUILDING

The first driver for the rating affirmation is Albania's progress on fiscal consolidation and structural reforms under the recently concluded three-year IMF program, as well as progress in strengthening the quality of institutions in pursuit of EU accession.

The government's fiscal deficit narrowed to 1.8% of GDP in 2016 from 5.2% in 2014. Fiscal discipline has been maintained through this electoral cycle and Moody's expects the deficit to decline further in 2017-2018, supported by expenditure rationalization, reduced energy-related payments and a number of measures aimed at improving revenue collection, an area where Albania still lags behind its regional peers. Fiscal consolidation efforts have been accompanied by enhancement of the fiscal framework through the amendments to the Organic Budget Law approved in mid-2016 and other initiatives aimed at strengthening public financial management. These measures include the new law on local finances and procedures to monitor and address the build-up of potential new arrears.

In particular, electricity sector reforms, implemented under the assistance of the IMF and the World Bank, have improved the financial position of electricity state-owned enterprises and have reduced the negative spillovers to the economy and the government's fiscal support to the power sector which, according to the IMF, has fallen to a projected 0.1% of GDP in 2017 from 0.9% of GDP in 2014.

Furthermore, the EU candidate country status granted in June 2014 has fostered progress on institutional reforms, accelerating the path toward the start of the formal accession negotiations and improving the prospect of further foreign investment as the business environment gradually improves. Since achieving candidacy status, the authorities have initiated a range of institutional reforms and in 2016 made significant progress through the adoption of a comprehensive package of constitutional amendments to reinforce the independence, efficiency and accountability of the judiciary. The European Commission views the implementation of judicial reform as an important step to open the accession negotiations. The country has also made improvements in the fight against informal economy, corruption and organized crime, exemplified by the adoption of anti-corruption action plans.

SECOND DRIVER: STRUCTURAL ECONOMIC CHALLENGES DESPITE IMPROVING GROWTH PROSPECTS

The second factor considered in the affirmation of the rating at B1 - notwithstanding the improvements noted above - is Albania's low economic strength, which balances improving growth dynamics against small economic size, low competitiveness and relatively low GDP per capita. Albania's low level of economic diversification compared with its peers weighs on its credit profile. Agriculture accounts for 23% of gross value added, while Albania also has a narrow export base, with 50.5% of merchandise exports destined for Italy.

Economic growth is supported by improvements in domestic demand and net exports. Moody's projects real GDP growth to accelerate slightly to 3.6% in 2017 and 3.8% in 2018 from 3.4% in 2016. Nevertheless, being a small and narrowly diversified economy, Albania remains exposed to external shocks, including adverse weather, given the importance of the agricultural sector and the country's reliance on hydroelectric resources. The latter continues to pose a risk, albeit a diminishing one, to economic growth and the fiscal position.

That said, the reform process toward EU accession, if sustained, is expected to gradually improve competitiveness and the business environment by strengthening the rule of law and property rights. These changes should be conducive to further income convergence toward regional peers in the coming years. Ongoing reforms in the energy sector and efforts to diversify the country's power supply through greater access to natural gas, with the Trans Adriatic Pipeline scheduled to begin operations in 2020, are expected to increase the country's economic resiliency to external shocks.

THIRD DRIVER: STILL HIGH, ALBEIT DECLINING, DEBT BURDEN WITH UNFAVORABLE DOMESTIC DEBT STRUCTURE

The third driver is the still high, albeit declining, debt burden along with still large financing needs reliant on a banking system burdened by high non-performing loans (NPLs).

Although declining, public debt still exceeded 70% of GDP in 2016, remaining above the pre-crisis level of 62.1% of GDP in 2012 and significantly above the B-rated median of about 54% in 2016. Furthermore, despite making progress, Albania continues to face fiscal risks, particularly from the electricity sector due to its exposure to adverse weather conditions that can lead to costly energy imports.

Despite declining considerably, gross borrowing requirements remain close to 20% of GDP in 2017, relatively large compared to rating peers and well above the B-rated median of 10.1% in 2017. The structure of the central government domestic debt, which accounts for about half of the total, has improved but continues to display a relatively short, albeit lengthening, maturity, with short-term debt accounting for 37% of the total as of end of March 2017, and a strong reliance on the domestic banking system, which holds about 60% of domestic debt. The banking system is adequately capitalized and liquid, but asset quality remains weak, albeit improving. NPLs stood at a high 18.3% of gross loans at end-2016. More than half of loans are denominated in foreign currency, reinforcing asset quality concerns, as part of these loans are to unhedged borrowers.

RATIONALE FOR STABLE OUTLOOK

The stable outlook balances improving fiscal metrics and reform advances, against a high public sector debt burden that constrains Albania's fiscal strength, and structural economic challenges, including a narrow production and export base, that continue to weigh on the country's economic strength. Notable progress has also been made in strengthening the quality of institutions and progress in judicial reform has improved the prospects for the start of formal EU accession negotiations. Despite these achievements, institutional strength remains weaker than similarly rated peers for rule of law and control of corruption.

WHAT COULD CHANGE THE RATING - UP

Upward pressure on the rating would likely only emerge in the event of developments which addressed at least two of Albania's key credit constraints: the small, and undiversified economy; the high public debt burden; and the country's weak institutions. A material decline in public sector debt, and further advances in institutional building resulting in an improved business environment and competitiveness, would lead to upward rating pressure.

WHAT COULD CHANGE THE RATING -- DOWN

Downward pressure on the rating would arise from a reversal of the fiscal adjustment and a failure to stabilize the public debt to GDP ratio or from a reduced political commitment to the institutional and economic reform agenda. Furthermore, emerging challenges in funding the current account deficit due to a significant decline of FDI would be credit negative.

GDP per capita (PPP basis, US$): 11,840 (2016 Actual) (also known as Per Capita Income)

Real GDP growth (% change): 3.4% (2016 Actual) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 2.2% (2016 Actual)

Gen. Gov. Financial Balance/GDP: -1.8% (2016 Actual) (also known as Fiscal Balance)

Current Account Balance/GDP: -9.6% (2016 Actual) (also known as External Balance)

External debt/GDP: 69.9% (2016 Actual)

Level of economic development: Moderate level of economic resilience

Default history: At least one default event (on bonds and/or loans) has been recorded since 1983.

On 01 August 2017, a rating committee was called to discuss the rating of the Albania, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have not materially changed. The issuer's institutional strength/framework, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has not materially changed.

The principal methodology used in these ratings was Sovereign Bond Ratings published in December 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Daniela Re Fraschini
Asst Vice President - Analyst
Sovereign Risk Group
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Yves Lemay
MD - Sovereign Risk
Sovereign Risk Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.